Binance, the world’s largest crypto exchange, is a sort of natural enemy for regulators worldwide. Recently, the crypto exchange agreed to pay 9.6 million reais ($1.76 million) to the Brazilian Securities and Exchange Commission (CVM) to settle a probe into its unauthorized offering of derivatives trading services in Brazil. This settlement marks a resolution in a case that has seen the exchange at odds with Brazilian regulators for several years.
The CVM concluded that Binance had been providing derivatives trading services to Brazilian residents without securing the necessary licenses, in violation of the country’s securities regulations. This settlement comes after a prolonged investigation and negotiations between Binance and the CVM, which initially ordered the exchange to cease its operations in this sector back in July 2020. At that time, the CVM had threatened Binance with a daily fine of 1,000 reais if it continued to offer these services without proper authorization.
In August 2023, Binance attempted to settle the matter by proposing a payment of 2 million reais ($370,000), but the CVM rejected this offer, deeming it insufficient. The final settlement, reached in February 2024, required Binance to pay a significantly higher amount, reflecting the severity of the violations.
This settlement with the CVM is part of a broader pattern of regulatory challenges that Binance has faced globally. In Canada, the Financial Transactions and Reports Analysis Centre (FINTRAC) imposed a C$6 million ($4.3 million) fine on Binance in May 2024 for failing to register as a foreign money services business and for not reporting large virtual currency transactions exceeding $10,000. Similarly, in India, the Financial Intelligence Unit (FIU) fined Binance $2.25 million in January 2024 for violations related to anti-money laundering (AML) regulations.
These penalties underscore the increasing scrutiny that Binance and other major crypto platforms are facing from regulators worldwide. The exchange’s settlement with the CVM serves as a reminder that even the largest players in the crypto industry must navigate complex regulatory landscapes and comply with local laws to avoid significant financial and legal consequences.
